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BACKGROUND:: To improve perinatal outcomes in the United States, access to prenatal care was expanded through Medicaid and women were encouraged to enter prenatal care early. OBJECTIVE:: The objective of this study was to determine if expanded eligibility for Medicaid increased use of prenatal care and reduced ethnic differences in use of prenatal care. RESEARCH DESIGN:: We conducted secondary analysis of California birth certificate data for 1990, 1995, and 1998. SUBJECTS:: We studied live-born singleton infants born to black, Asian, Latina, and white women (n = 1,483,951). MAIN OUTCOME MEASURES:: Inadequate utilization of prenatal care. RESULTS:: The proportion of live-born infants whose mothers had inadequate prenatal care decreased from 20% in 1990 to 14% in 1995 and 12% in 1998. In addition, the proportion of pregnant women with no insurance or who were self-paying fell from 13.1% in 1990 to 4.2% in 1995 and 3.6% in 1998 (P <0.001). Reductions in overall prevalence of inadequate use of prenatal care and ethnic disparities in use of prenatal care were not fully explained by increases in Medicaid coverage. CONCLUSIONS:: Since California expanded access to Medicaid-funded prenatal care, there has been a substantial reduction in inadequate use of prenatal care and fewer women have no insurance or are self-paying. To further reduce ethnic disparities in use of health services, new policies must be developed to remove nonfinancial barriers to early and continuous use of prenatal care. [ABSTRACT FROM AUTHOR]